Vital Care Franchise Costs $536,000 - $995,000 (2024 FDD Summary)

Vital Care Infusion Services stands out in the healthcare franchise sector as a leading provider of infusion pharmacy services, offering a unique and essential medical service across the United States. Founded in 1986 by Johnny Bell, a consultant pharmacist who recognized the potential benefits of infusion therapy services outside the hospital setting, Vital Care has since expanded its footprint spread across numerous states.

Headquartered in Meridian, Mississippi, Vital Care has developed a robust franchise model that supports entrepreneurs in establishing and scaling their infusion pharmacy businesses. The franchise offers comprehensive support ranging from startup and growth strategies to payer contract support and compliance guidance, ensuring franchisees have the necessary infrastructure to succeed.

With a focus on serving secondary and tertiary population centers, Vital Care franchises make infusion therapies accessible to a broader segment of the population, addressing a significant need within the healthcare system​​​​. The infusion pharmacy sector, particularly Vital Care, proved to be both recession and pandemic-proof, showcasing impressive growth even during challenging times like the 2020 pandemic.

This resilience is attributed to the increasing demand for home and specialty infusion services, which offer patients the convenience and safety of receiving treatments outside hospital settings. Vital Care's infusion pharmacies are equipped to deliver a wide range of pharmaceutical drugs via intravenous IV or injection, catering to patients with chronic and acute diseases. The franchise's success is further bolstered by its unparalleled support system for franchisees, which includes clinical, operational, billing, and marketing assistance, ensuring high-quality patient care and efficient business operations​​​​.

Initial Franchise Fee

The initial franchise fee is $50,000, payable as a lump sum upon signing the Franchise Agreement. This fee is non-refundable and is considered fully earned once paid, with no obligation for a refund under any circumstances.

Royalty Fee

The standard Royalty Fee includes varied rates such as 19% for Non-Specialty Therapies and related products/services, 10% for Specialty Therapies, and 3% for Select Specialty Therapies, among others. These fees are non-refundable and are paid for the ongoing right to use the Marks and System.

Marketing Fee

Franchisees may need to contribute up to 1% of their Gross Revenue each month to the Brand Fund, if such a fund is established by the franchisor.

Pharmacy Software Fee

The Pharmacy Software Fee varies and may change over time. It is paid for a license to use designated pharmacy software, and the franchisor reserves the right to change the software and associated fees as needed.

Technology Fee

Franchisees must pay a monthly Technology Fee of up to 0.5% of Gross Revenue for various technology products and services, excluding the Pharmacy Software. The fee and the services provided can change, with franchisees receiving at least 30 days' notice before any new fee amount is implemented.

Successor Fee

Upon executing a successor franchise agreement, a Successor Fee of 25% of the then-current franchise fee is payable. For renewals under the Renewal Addendum, the fee is $4,000.

Transfer Fee

A Transfer Fee is applicable upon the transfer of the VC Business or Agreement, with the fee being 25% of the then-current Franchise Fee for a control transfer and $2,500 plus administrative costs for a non-control transfer. No fee is required for certain exceptions like an owner's death, incapacity, or bankruptcy.

The franchisor provides various types of training to ensure franchisees are well-prepared to operate their VC Business successfully. Here's an overview of the training provided:

Initial Training

• Format and Location: Conducted at the franchisor's offices in Meridian, Mississippi, or remotely via recorded media, teleconference, videoconference, the Internet, or webinar, as determined by the franchisor.
• Duration: Currently consists of four days, but the franchisor reserves the right to modify the length, location, and timing of the training.
• Included in Franchise Fee: The cost for instructors, facilities, and materials for the franchisee's required trainees is covered by the Franchise Fee, provided all trainees attend the same session. Additional representatives can attend if space allows.
• Completion: Trainees must successfully complete the Initial Training at least ten days before the opening deadline, and the franchisor determines what constitutes successful completion. Failure to complete the training satisfactorily may require repeating the training or sending replacement trainees.

Additional and Remedial Training

• Optional Programs: The franchisor may conduct mandatory or optional additional training programs for the franchisee's required trainees and/or employees. There's no charge for mandatory programs, but a reasonable fee may be applied for optional ones.
• Responsibility: The franchisee, their Operating Principal, and Key Managers are responsible for training all other employees according to the franchisor's standards and programs. Failure to adequately train employees may result in the franchisor requiring attendance at their headquarters or covering the costs for a franchisor representative to provide the training on-site.

Software and Technical Training

• Software Training: Includes on-site training at the franchisor's office, written instructions, training videos, remote support, and access to a software test site. Franchisees must complete the training and pass competency exercises to VC's satisfaction before going live with the software. Additional training beyond the initial scope may incur extra fees.

The franchise agreement for Vital Care provides limited territorial protection for its franchisees. While franchisees do not receive an exclusive territory, they are afforded certain protections within their designated area. Specifically, during the term of the franchise agreement and provided the franchisee is in compliance with its terms, the franchisor and its affiliates agree not to open or operate, nor to license a third party to open or operate, a physical premises for a VC Business within the franchisee's territory.

However, it's important to note that this territorial protection is limited. Franchisees may face competition from other franchisees, from outlets owned by the franchisor, or from other channels of distribution or competitive brands controlled by the franchisor.

Furthermore, the franchisor and its affiliates retain the right to conduct any business activities, under any name, in any geographic area, and at any location, which could potentially impact the franchisee's business. This includes the use of other channels of distribution, such as the Internet, catalog sales, telemarketing, or other direct marketing, to make sales within the franchisee's territory using the Marks or other trademarks.

The document emphasizes the need for active involvement in the development and promotion of the VC Business. Franchisees are required to "actively promote" their VC Business throughout the entire term of the agreement and follow any reasonable promotional guidelines established by the franchisor. They must expend the necessary efforts and resources to develop the VC Business in their territory to its full potential, maintaining sufficient staff and inventory to properly service the entire territory. 

This requirement for active promotion and development suggests that the franchisor expects franchisees to be actively involved in their VC Business, which may not align with a purely passive investment approach. Passive investment typically involves financial contribution without direct involvement in the day-to-day operations, which seems contrary to the expectations set out in the franchise agreement regarding active promotion and development of the business.